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Disruptive Innovation Comes in Waves

The extent of economic disruption caused by each of the major technology eras has varied greatly.

One of the final steps in producing an LEF research report is distilling our findings down to a few key messages, and ideally a single image. For example, countless thousands of words have been written about the outlook for disruptive innovation, cloud computing, and the internet of things. But is there a simple picture that easily communicates our overall sense of what is going on? Our attempt to do this for our recent report on The Myths and Realities of Digital Disruptions is shown below. 

The visual metaphor is that, like information technology itself, disruptive innovations have always come in waves, and just like waves in the real world, disruptive waves vary significantly in their size and power. While the actual amplitudes plotted above are admittedly subjective, they depict our belief that the extent of economic disruption caused by each of the major technology eras has varied greatly. Looking back, mainframes, minicomputers and personal computers (although exciting and wondrous at the time) upended relatively few industries outside of the IT supplier business itself. 

In contrast, the biggest industry disruptions have consistently stemmed from the mainstream web/internet, and this remains true today. The great internet success stories have been a roughly equal mix of cross-industry (Google, eBay, Facebook, LinkedIn, Twitter) and industry-specific (Amazon, Netflix, Airbnb, Lending Club, PayPal) firms. When taken together, there is little doubt that the web has been an enormously disruptive economic force, arguably on the scale of the automobile, if not electricity itself. 

In contrast, although mobile technology has transformed the way many of us live and work – and continues to have a significant impact on just about every industry sector – in terms of enabling major economic disruptions, it has been a distinctly lesser force. Outside of mobility’s huge impact on the IT and telecom sectors, only Uber has become a giant mobility-based disruptor. This is why we believe that, contrary to what we often hear, mobility is much more of a sustaining than a disruptive technology.

Similarly, the figure portrays our view that the internet of things (IoT) is also proving to be more sustaining than disruptive. While all of the current IoT technologies listed above have important potential – especially 3D printers, 3D goggles and drones – and will enable unprecedented levels of machine intelligence, awareness and efficiency, they seem unlikely to match mobility’s dramatic effects on the incumbents of the ICT industry, let alone the aggregate disruptive impact of the world wide web. 3D printing may become the most important eventual exception. 

Technologies that sustain incumbents can enable just as much societal progress and change as those led by new firms.

But let’s be clear. This is in no way a pejorative statement. Technologies that sustain incumbents can, like mobility, enable just as much societal progress and change as those led by new firms. It’s only from an incumbent challenge perspective that the figure suggests that we are in a bit of a disruptive lull, even as technology races ahead. 

The tallest waves are just over the horizon

However, as also suggested by the figure, we expect this lull to give way to a new era rooted in global science. In addition to the ongoing research in North America, Europe and Japan, world-class R&D is now also taking place in China, India, Korea, Taiwan, Russia, Singapore, Israel and Australia, with Brazil, Mexico, Chile, South Africa and others not too far behind. The total scale of global scientific endeavour will likely increase by almost an order of magnitude, and this should spur the biggest waves of all.

This vast expansion of talent, investment and innovation will be needed because supporting a future planet of ten billion people will require major scientific advances and significant disruptive change across virtually every realm of societal activity, including transportation, energy, food, materials, healthcare, design, infrastructure, education and the environment. One doesn’t have to fully embrace Ray Kurzweil’s vision of The Singularity to imagine that we may well enter a world where the technology innovations of the past will seem primitive, and where disruptive market shifts will be far greater than those we have seen thus far. Information technology will be essential in enabling this progress.

Who would bet against these changes?

Of course, the exact timing of these changes is impossible to predict (although we did take our best shot at this in last year’s Of Wonders and Disruption report). But precise timings aside, unless societal progress is derailed by some sort of cataclysmic human or natural disaster, who would bet against these changes? Taken together, they will likely add up to the most important disruptions of all, as the global economy is fundamentally transformed through human and machine intelligence, and today’s science fiction becomes tomorrow’s science fact. The biggest waves have yet to come in.

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AUTHORS

David Moschella
Research Fellow
David Moschella, based in the United States, is a Research Fellow for Leading Edge Forum.  David's focus is on industry disruptions, machine intelligence and related business model strategies.  He is the project lead for our 2017 research into Disrupting ‘The Professions’ – Scenarios for Human and Machine Expertise. David was previously Research Director of the programme. David’s key areas of expertise include globalization, industry restructuring, disruptive technologies, and the co-evolution of business and IT.  David is the author of multiple research reports, including 2016 Study Tour Report: Applying Machine Intelligence, There is Now a Formula for Machine Intelligence Innovation,  Embracing 'the Matrix' and the Machine Intelligence Era and The Myths and Realities of Digital Disruption. An author and columnist, David’s second book, Customer-Driven IT, How Users Are Shaping Technology Industry Growth, was published in 2003 by Harvard Business School Press.  The book predicted the shift from a supplier-driven to today’s customer-led IT environment.  His 1997 book, Waves of Power, assessed global competition within the IT supplier community.  He has written some 200 columns for Computerworld, the IT Industry’s leading publication on Enterprise IT, and has presented at countless industry events all around the world. David previously spent 15 years with International Data Corporation, where he was IDC’s main spokesperson on global IT industry trends and was responsible for its worldwide technology, industry and market forecasts.    

CATEGORIES

21st Century
Adaptive Execution
Assets/Capabilities
Identity/Strategy
Proactive, Haptic Sensing
Reimagining the Portfolio
Value Centric Leadership

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